The National Futures Association have made a couple of announcements recently that strongly suggest the number of US spot forex brokers and their associated introducing brokers are going to decline even further in the near future. Last week the NFA implied that the proposed new CFTC regulations about forex IBs are going to be implemented much as originally drafted. They pointed out that:
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Dukascopy have finally followed in the footsteps of MIG, and after a long wait they have at last received their banking licence from FINMA, the Swiss regulator. Consequently they now proudly call themselves "Dukascopy Bank SA". According to their press release:
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The publicity battle over financial reform in the United States gets ever hotter. A variety of glossy magazines are currently sinking their teeth into Goldman Sachs following the news that the investment bank is under attack by regulators on both sides of the Atlantic. Although its articles are sprinkled with the word "alleged", Time seems to have already judged Goldman Sachs and the rest of Wall Street guilty as charged. In one article this weekend Time highlights the irony that Gary Gensler, a former Goldman Sachs partner and now chairman of the CFTC, is currently gunning for his previous paymasters. According to Time:
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Last Friday the U.S. Securities and Exchange Commission charged the investment bank Goldman Sachs and their London based Vice President Fabrice Tourre with fraud:
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.
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Following the example of the forex dealers a few weeks ago, a group of 6 introducing brokers have banded together to form the Introducing Brokers Coalition against the CFTC proposals for “Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries”. Unlike the forex dealers, first on the IBs list of proposals they would like to see changed is:
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In the first response I have spotted made by a forex broker to their recent proposal to limit leverage to a maximum of 10 to 1, the CFTC earlier this week published a 6 page letter from Interbank FX on their website. Interbank FX welcome most of the other CFTC proposals, but say that the 10 to 1 leverage proposal:
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In response to the proposed legislation to reduce forex leverage to 10 to 1, beleaguered US brokers have banded together to form the Forex Dealers Coalition to fight a common enemy; the CFTC! The Coalition have just launched their website, which urges their readers to:
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It has been brought to our attention that the original link we published to the page on the CFTC website that allowed you to download the 193 page document detailing its newly released proposals to limit leverage in the retail forex industry in the United States to 10 to 1 now simply says:
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Fresh from his onslaught on retail forex traders, Barack Obama today took aim at another target instead. Those nasty, greedy bankers. According to Bloomberg Mr. Obama said in an interview with ABC that:
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The CFTC has now published details of how to comment on its new ten to one leverage proposals for retail forex accounts. If you click the link at the bottom of that page you can also read the initial comments that the CFTC has received.
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